In a recent report, “The 8th Annual Demographia International Housing Affordability Survey,” which referenced NAR’s housing data, the authors look at housing affordability in 325 metropolitan markets in Australia, Canada, Hong Kong, Ireland, New Zealand, the United Kingdom and the United States.
The survey showed that housing affordability is highest among U.S. markets. Following the U.S. are markets in Canada and Ireland. The United Kingdom, Australia and New Zealand rank as the least relatively affordable markets.
To measure affordability, the authors divided the median house price by gross annual median household income. This is just one of the measures of affordability. More elaborate measures may account for mortgage interest, for example.
Among 81 major metropolitan markets analyzed, 24 were found to be affordable markets, 20 moderately unaffordable major markets, 13 seriously unaffordable major markets and 24 severely unaffordable major markets. All of the affordable major markets were in the United States while three of the moderately unaffordable markets were in Canada and one in Ireland with the other 16 in the United States. Table 4 summarizes the results.
The most affordable major market was Detroit, followed by Atlanta. The other 22 affordable major markets were Phoenix, Rochester, Cincinnati, Cleveland and Las Vegas, Dallas-Fort Worth, Houston, Orlando, Jacksonville, Nashville, Oklahoma City, Sacramento and Indianapolis. All major markets in Australia and New Zealand, as well as Hong Kong were severely unaffordable. Hong Kong was the least affordable major market, followed by Vancouver and Sydney.
Among all 325 markets surveyed, there were 128 affordable markets, 117 in the United States, 9 in Canada and 2 in Ireland. There were 87 moderately unaffordable markets, 64 in the United States, 19 in Canada, 3 in Ireland and 1 in the United Kingdom. There were 39 seriously unaffordable markets and 71 severely unaffordable markets. Australia had 25 severely unaffordable markets, followed by the United Kingdom with 20 and the United States with 14. Canada had 6 severely unaffordable markets, while New Zealand had 5. Table 5 summarizes all results.
To read the report: http://www.demographia.com/dhi.pdf